I US Securities and Exchange Commission (SEC) he has filed a lawsuit Developer of Metamask, Consensys. The Commission alleges that the crypto company violated securities laws by operating as an unregistered broker.
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SEC Alleges Securities Violation Agreements Using Metamask
According to the court orderthe SEC alleges that Consensys acted “as unregistered dealer of crypto asset securities through its MetaMask Swaps service “since October 2020. The commission also accused the crypto company of engaging in unregistered offers and sales of securities through crypto staking systems.
The SEC said Consensys has traded more than 36 million crypto transactions since 2020 through its MetaMask Swaps, at least 5 million of which involved crypto asset securities. Metamask is known as one of the most widely used crypto wallets. In addition to storing their crypto assets in the app, users can buy and sell cryptocurrencies by exchanging one crypto asset for another.
This ‘Switching’ service forms the focal point of the SEC’s enforcement action. The SEC says some of these crypto assets are securities, and by allowing users to exchange these securities, Consistency he acted as an unregistered stockbroker, thereby violating securities laws in the process.
The SEC went ahead with the listing Polygon (MATIC)Decentraland (MANA), Chiliz (CHZ), Sandbox (SAND), and Luna (LUNA) as crypto securities made available for trading on the Metamask exchange platform.
Additionally, the SEC accused Consensys of engaging in “traditional securities market activity” by offering and selling securities of Lido and Rocket Pool. The commission said that the key programs offered by Lido and Rocket Poo were investment contracts and that Consensys was wrong to offer these securities by conducting unregistered transactions on its ‘MetaMask Staking’ platform.
The Genesis of the Legal War Between the SEC and Conformity
Interestingly, the SEC case against Consensys comes a few months after the crypto company filed a lawsuit against the Commission, accusing the SEC of “illegal usurpation.” Consensys sought injunctive relief against potential action from the SEC. They also asked the court to reveal that Ethereum was not a security and that the SEC had no jurisdiction over crypto-related matters.
The crypto firm seems to have won that battle, considering that The SEC dropped its investigation in the case of Ethereum as collateral. However, in books to inform Consensys about Decision of the Commission dropping its investigation into Ethereum, the SEC had warned the crypto company that it could bring enforcement actions against them related to other issues, which they have now done.
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Responding to SEC case, Consensys said that it will “vigorously pursue” the lawsuit it originally filed against the SEC. The crypto firm also noted that they fully expected “the SEC to follow through on its threat to require MetaMask to be registered as a securities broker.
Featured image from CNBC, chart from TradingView
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